Replacing Denmark's Aging F-16s Could Place Strain on Defense Budget

Danish F-16 fighters are seen during the Danish Air Show 2014 at Karup Air Base in Karup, June 22, 2014. AFP PHOTO / SCANPIX DENMARK / HENNING BAGGER +++ DENMARK OUT (Photo credit should read HENNING BAGGER/AFP/Getty Images)

HELSINKI — The significant investment planned by Denmark to replace the Danish Air Force's (DAF) ageing F-16s is raising concerns both domestically and within NATO that the capital-heavy program may place a major drain on the military's future core budgets.

Based on current estimates, the fighter replacement program is likely to cost Denmark between US $3 billion and US $4.5 billion, depending on the number of aircraft eventually purchased.

Moreover, the Danish government will need to budget for additional associated expenditures of between $10 billion to $13 billion to cover operational and maintenance costs over the aircraft's intended 30-40 year lifespan.

Denmark sought bids on 24, 30 and 36 aircraft. These numbers are substantially lower than Denmark's initial ambition to acquire up to 48 aircraft at the outset of the acquisition program in 2005. The DAF's front-line fighter fleet currently has 30 operational F-16s.

"More money is needed to finance the fighter replacement program. What is quite clear is that the project can not be funded from within the existing core defense budget as it stands today," said Rasmus Jarlov, a member of the Conservative Party and chairman of the Danish parliament's Committee on Defense.

A fighter replacement program (FRP) financed solely from the annual defense budget could prove too large a drain on the Danish Defense Force's (DDF) finances, which are already in decline, said Jarlov.

Cross-party political support for the FRP has been based on the understanding that the program could be funded from within an expanded defense budget.

The Conservative Party-led Danish government, headed by Prime Minister Lars Løkke Rasmussen, was elected to office in June 2015 on a robust commitment to implement fiscally correct public finance policies.

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The government’s room to maneuver on defense spending generally, and the FRP specifically, is tempered by the fact that it is a single-party minority government reliant on the continued support of the Liberal Alliance, the Danish People's Party (Dansk Folkeparti) and the Conservative People’s Party (Det Konservative Folkeparti).

The Danish Cabinet is in discussions with the Ministry of Defence to formulate a financing solution for the FRP that will seek to protect the DDF's core budgets going forward. The present five-year defense spending agreement is set to expire in 2017.

The MoD is mindful of concerns communicated by NATO and opposition leaders that the FRP must not be such a drain on the DDF's budget and resources that it weakens Denmark's national military capability and its capacity to contribute to ongoing NATO operations and tasks.

"If the intention is that the money must be found within the normal defense budget, then NATO's concerns are largely justified," said Henrik Breitenbauch, director of the Copenhagen-based Centre for Military Studies.

Denmark's New Fighter Program Office (NFPO), which operates under the MoD, is expected to complete all components in its final evaluation of candidate aircraft by the end of January 2016.

The MoD is set to present a recommendation, based on the NFPO's candidate aircraft evaluation report, to the Cabinet by the end of the first half of 2016. This could potentially happen as soon as March or April.

The aircraft recommendation stage will be followed by a public debate, which will also trigger political cross-party discussions around the aircraft selection and the government's project financing plan.

The FRP has experienced five separate delays under five difference defense ministers since the project was launched in August 2005. The short list of candidate aircraft in the competition includes the Eurofighter Typhoon, the Boeing F-18F Super Hornet and the F-35A Lightning II (Joint Strike Fighter).